North and South Korea agreed on joint projects today to conclude economic talks that were near collapse over the North's nuclear weapons policy.
A final statement is being drawn up as delegates haggle over wording, although agreement had been reached on projects including cross-border railway links and an industrial complex in Kaesong, on the North Korean side of the border.
South Korea also agreed to ship 400,000 tonnes of rice to its bankrupt neighbour, reports from Pyongyang said.
The talks were suspended following Tuesday's first formal session when North Korea threatened South Korea with an "unspeakable" disaster if it sided with the United States in the standoff.
South Korea demanded an explanation for the outburst and of North Korea's decision to publish the remarks in breach of an agreed news blackout.
Pyongyang, reacting to a US summit meeting between President George W. Bush and South Korean counterpart Mr Roh Moo-Hyun, countered with a demand for Seoul to explain an apparent hardening of its policy towards North Korea.
In a joint statement following their summit, Mr Roh and Mr Bush warned that "increased threats to peace and stability" would merit "consideration of further steps" in dealing with North Korea's nuclear weapons drive.
An angry North Korea accused Seoul of aligning itself with Washington and demanded to know what those "further steps" were, fearing they implied possible military action.
The talks were rescued from collapse when North Korea agreed to provide an explanation of its "unspeakable" disaster threat, according to the South Korean side, though details remained sketchy.
AFP